IncGamers has word from the early days of friends and family beta testing of Diablo III that players seem to be experiencing no latency at all while playing the game no matter their location, in spite of its client/server architecture. They have a couple of updates about this since first posting the story, the second of which says they feel they have: "100% confirmation that this is indeed correct! Latency no longer matters at all for combat." Here's word:

F&F sources have it that Blizzard are using a new method of client/server communication that provides a secure and tamper-proof method of using the local client to handle its own calculations, while sending the data to the server for verification. The Client doesnít require the server to respond, hence removing Latency from the equation. The exact technical information of how this works is unknown, particularly how it protects the game from tampering with the client, however it is believed that the server checks all the data that comes from the client, and if it detects tampering it disconnects the client. This eliminates the need for the client to have to wait for a response from the server, and runs as business as usual unless the server doesnít like what the client has sent it.

This is huge news, particularly for players in Australia, New Zealand and other high-latency regions that donít have localized servers. Diablo 3 combat looks very fast-paced and the slightest delay would make the game feel rather broken. As well-illustrated by this monk gameplay video.